INDIANAPOLIS (March 3, 2006)—The National Association of Mutual Insurance Companies (NAMIC) has taken a position on one of two major insurance bills that Florida lawmakers will face when they convene Tuesday, a NAMIC spokesperson said today.
Senior State Advocacy Manager David Reddick said NAMIC, which represents 125 member companies doing business in Florida, has joined other industry representatives in supporting Floridians for Lower Insurance Costs, a coalition of concerned citizens, businesses and taxpayers concerned about the growing waste, fraud and abuse in the current no-fault system. More information about the coalition is available at www.lowerinsurancecosts.org.
“It’s clear to us that the no-fault system isn’t working in Florida,” said Reddick, who added, “The average Florida family is paying at least $250 a year more than it should for auto insurance.”
Three years ago, the Florida Legislature enacted a provision calling for the no-fault law to sunset in 2007 unless lawmakers reenacted it during the 2006 legislative session. Senate Proposed Bill (SPB) 7094 has been introduced and forwarded to the Senate Banking and Insurance Committee. The bill proposes a medical fee schedule for PIP set at a specified percentage above the Medicare fee schedule and eliminates the contingency risk multiplier applied to attorney fee awards.
“We know several auto insurers favor the reforms contained in SPB 7094, but once the legislative debate gets under way, the reenactment provisions are likely to be watered down so much that substantive reform isn’t going to be possible,” said Reddick. “That is why NAMIC simply favors letting the no-fault law sunset next year.”
Reddick said the other major insurance bill before lawmakers this year is a property bill (PCB IN 06-01), which is in the House Insurance Committee. He said this bill proposes several changes to Citizens Property Insurance Corporation, the insurer of last resort, including new benchmarks for determining Citizens’ rates and a prohibition on insuring single-family residences in excess of $1 million.
“The bill contains a provision requiring our insurers to perform all the servicing and claims functions on the windstorm portion of homeowner’s policies,” Reddick said. “That will be problematic for some of our members.”
A second provision would create a “flex band” for personal lines coverage where a filed rate would be considered excessive if it represented more than a 10 percent statewide average change from the then-current lawful rate and no more than a 25 percent change in any one rating territory.
“It is too early in the legislative process to know if this provision will stay in the bill,” Reddick said, adding, “Based on past sessions, it is unlikely to survive.”
The Florida Legislature is expected to meet through May 5.
A total of 125 NAMIC member companies write 37 percent of the homeowners insurance and 34 percent of the automobile insurance in Florida.
NAMIC has produced an Issue Brief that examines in some detail the bills dealing with no-fault and property insurance reforms. The Issue Brief is available at: http://www.namic.org/insbriefs/060303Florida.pdf
For further information, contact
Rick Nelson, APR, CAE
(317) 875-5250 Tel
(317) 879-8408 Fax
Posted: Friday, March 03, 2006 12:00:00 AM. Modified: Friday, March 03, 2006 11:24:45 AM.
317.875.5250 - Indianapolis | 202.628.1558 - Washington, D.C.